Small-cap stocks can be incredibly lucrative investments because their lack of analyst coverage leads to frequent mispricings. However, these businesses (and their stock prices) often stay small because their subscale operations make it harder to expand their competitive moats.

Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three small-cap stocks to avoid and some other investments you should consider instead.

EVgo (EVGO)

Market Cap: $629 million

Created through a settlement between NRG Energy and the California Public Utilities Commission, EVgo (NASDAQ: EVGO) is a provider of electric vehicle charging solutions, operating fast charging stations across the United States.

Why Is EVGO Not Exciting?

1. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders

EVgo’s stock price of $4.65 implies a valuation ratio of 33.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than EVGO.

WesBanco (WSBC)

Market Cap: $3.2 billion

Tracing its roots back to 1870 in West Virginia, WesBanco (NASDAQ: WSBC) is a bank holding company that provides retail and commercial banking, trust services, insurance, and investment products through its subsidiaries across several Midwestern and Mid-Atlantic states.

Why Do We Think Twice About WSBC?

1. Net interest margin of 3.1% is well below other banks, signaling its loans aren’t very profitable
2. Flat tangible book value per share over the last five years suggest it must find different ways to enhance shareholder value during this cycle
3. Below-average return on equity indicates management struggled to find compelling investment opportunities

WesBanco is trading at $33.34 per share, or 0.8x forward P/B. Read our free research report to see why you should think twice about including WSBC in your portfolio.

Provident Financial Services (PFS)

Market Cap: $2.51 billion

Founded in 1839 and serving communities across New Jersey, Pennsylvania, and New York, Provident Financial Services (NYSE: PFS) operates a regional bank providing commercial, residential, and consumer lending alongside wealth management and insurance services.

Why Does PFS Worry Us?

1. Net interest margin of 3.2% is well below other banks, signaling its loans aren’t very profitable
2. Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 7.1% annually
3. Tangible book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments

At $19.23 per share, Provident Financial Services trades at 0.9x forward P/B. If you’re considering PFS for your portfolio, see our FREE research report to learn more.

High-Quality Stocks for All Market Conditions

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Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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